What can be done about the affordability challenge?

The cost of new electricity generating technologies tends to fall over time.

Designs can be improved and made more efficient with each new iteration. Construction processes can be streamlined as the industry gains experience, reducing the amount of labour needed. Operators can learn over time to run the equipment in the most efficient way, minimising costs and maximising income.

In order to tackle climate change, the world needs to undergo a significant shift towards low-carbon energy sources. While many of these currently appear to rank among the costlier ways of generating electricity, in many cases this is because the technology has only emerged relatively recently.

Low-carbon energy sources like nuclear and wind are expected to be among the most affordable electricity generating technologies by the year 2020. This is due partially to the cost of these technologies decreasing through experience and partially to the effect on high-carbon energy sources, like fossil fuels, of taxes and levies on greenhouse gas emissions.

This is why, when estimating the affordability of different energy sources, it is important to take into account all the costs – including planning, construction, operation, decommissioning and environmental costs – as well as factors like the typical lifetime of the equipment.